Trump was elected as the President of the United States in 2024, as he has shown a more crypto-friendly attitude compared to the Biden administration, leading to a rise in the crypto market. During his campaign, he promised measures such as firing SEC Chairman Gary Gensler, incorporating BTC into the national strategic reserve, and making the US a BTC superpower.
Further Reading: Reviewing Trump's Pro-Crypto Promises: BTC Strategic Reserve, Firing SEC Chair, No CBDC..
However, Forbes magazine's editorial expressed a reserved attitude towards whether the Trump administration can truly create a friendly regulatory environment for the crypto industry, pointing out the uncertainty surrounding Trump's involvement in promoting crypto-related legislation and the likelihood of Congress passing crypto bills.
Can Cryptocurrencies Become a Priority?
The report indicates that Trump's appointment of regulatory agency leaders will play a crucial role in the crypto industry's policies, particularly the chairs of the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Treasury Secretary.
Currently, Hester Peirce, an SEC commissioner known as the "crypto mom" in the industry, is one of the leading candidates predicted to be appointed as the new SEC chairman by Trump. The leading candidate for Treasury Secretary is Scott Bessent, Trump's chief economic advisor, whose pro-crypto stance has been endorsed by VanEck's digital asset research head, Matthew Sigel.
Although these key position candidates are expected to have a friendly attitude towards the crypto industry, Forbes emphasizes that the priority these regulators place on cryptocurrencies in their policy agenda is still unclear.
Furthermore, while the Trump administration may push for deregulation in most industries, the crypto industry urgently needs to establish a clear regulatory framework. Therefore, whether these regulators will prioritize crypto-related issues will directly impact the implementation speed of policies. While some ongoing SEC lawsuits may be quickly resolved, the future policy direction is expected to include guidance or regulations that are favorable to the crypto industry.
Will Cryptocurrencies Be Classified as Commodities?
The most important guidance may come from a joint document from the SEC and CFTC, clarifying how these two agencies will determine whether a token is a security or a commodity. Under the Trump administration, this guidance is likely to lean towards the industry's preferred view, with most tokens being treated as commodities rather than securities.
However, the classification of tokens is also an issue that Congress may address through legislation, such as potentially introducing a crypto-related bill similar to the 21st Century Financial Innovation and Technology Act.
The benefit of making such changes through legislation is that it is more difficult for future crypto-skeptical administrations to undo, compared to interpretive rules or agency regulations. However, the downside is that the passage of such bills can be a lengthy process.
Passing Legislation is a Lengthy Process
Currently, the Republicans have gained control of the Senate, and while the House of Representatives situation is still unclear, the Republicans are temporarily leading. If they successfully win the House, it will result in a complete Republican control of the government.
However, Forbes points out that this does not guarantee that the next Congress will be able to pass a bill similar to the FIT21 Act or other crypto-related legislation. Such bills may still require the support of some Democratic senators, and the priority of crypto legislation among the many legislative agendas is yet to be determined, leaving the outlook uncertain.
Further Reading: Interpreting the Impact of the US FIT21 Crypto Bill on the Web3 World in the Next 10 Years
Additionally, who will succeed Patrick McHenry as the chair of the House Financial Services Committee is still undecided, and the successor will significantly impact the chances and timing of legislation being enacted.
Forbes concludes that under a Trump administration and Republican control, the prospects for cryptocurrencies are undoubtedly better than under the Biden government. However, this change will take time, as new agency leaders must be confirmed by the Senate, and even with a single-party control of the White House and both chambers of Congress, the legislative process is notoriously slow and difficult.
